Labor Market Implodes: Job Openings Crater, Prior Data "Unexpectedly" Revised Sharply Lower
For months we have been warning that at a time when the US economy is careening into a hard landing recession, the manipulated, seasonally-adjusted, and politically goalseeked job openings data released as part of the DOL's JOLTS report is sheer rubbish (see "US Job Openings Far Lower Than Reported By Department Of Labor"; "Handle The JOLTS Data With Care", "Just Make it Up: Job Openings Unexpectedly Soar As Labor Department Now Guessing What The Number Is"). Today, the BLS finally got the memo.
With consensus expecting only a modest drop in the July job openings from 9.582 million to 9.5 million, what the BLS reported instead was a doozy: in July there were just 8.827 million job openings, the first sub-9 million print since March 2021. It was also the 3rd biggest miss on record!
Worse, had the BLS not drastically slashed the May number from 9.582MM to a laughable 9.165MM, the drop would have been almost 800K job openings. And yes, today's downward revision...
... continues the recent trend of every single data point in the Biden administration being revised sharply lower in subsequent month(s), in a coordinated propaganda attempt to make the economy look stronger, then quietly revise it away when everyone forgets.
All the 2023 monthly jobs data was revised lower and now all the housing data has also been revised... drumroll... lower pic.twitter.com/20Om6rHvFJ
— zerohedge (@zerohedge) August 23, 2023
Every monthly payrolls number in 2023 has been revised lower to manipulate perception and markets pic.twitter.com/T6qyXuqY7a
— zerohedge (@zerohedge) August 4, 2023
Industrial Production 1.0%, Exp. 0.3%, Last revised lower to -0.8%
— zerohedge (@zerohedge) August 16, 2023
Manufacturing production 0.5%, Exp. 0.0%, Last revised lower to -0.5%
Cap utilization 79.3%, Exp. 79.1%, Last revised lower to 78.6%
And while one month does not a trend make, three months does, which is bad because the 3-month drop in job openings was 1.5 million, the second highest on record surpassed only by the total economic shutdown during the covid crash.
According to the BLS, the largest decrease in job openings was in professional and business services (-198,000); health care and social assistance (-130,000); state and local government, excluding education (-67,000); state and local government education (-62,000); and federal government (-27,000). By contrast, job openings increased in information (+101,000) and in transportation, warehousing, and utilities (+75,000)
The plunge in the number of job openings meant that in July the number of job openings was just 2.986 million more than the number of unemployed workers, the lowest since August 2021.
Said otherwise, in July the number of job openings to unemployed dropped to just 1.51, the lowest level since Sept 2021.
As the number of job openings cratered to the lowest in more than two years, the number of people quitting their jobs - an indicator traditionally closely associated with labor market strength as it shows workers are confident they can find a better wage elsewhere - also plunged by 253K to just 3.549MM (after tumbling 265K in May), the lowest since Feb 2021.
And just in case some still believe the "Bidenomics" strong jobs lie, the number of hires also crashed in July, plunging by 167K to just 5.773 million, the lowest level since Jan 2021.
So what to make of this ugly data which as not only UBS, but also the NFIB...
... Opportunity Insights...
... and even Goldman ...
... have been warning is long overdue?
The answer is simple: while the drop was substantial, the real number of job openings remains still far lower since half of it - or some 70% to be specific - is guesswork. As the BLS itself admits, while the response rate to most of its various labor (and other) surveys has collapsed in recent years, nothing is as bad as the JOLTS report where the actual response rate has tumbled to a record low 31%
In other words, more than two thirds, or 70% of the final number of job openings, is estimated!
And at a time when it is critical for Biden to still maintain the illusion that at least the labor market remains strong when everything else in Biden's economy is crashing and burning, we'll let readers decide if the admin's Labor Department is plugging the estimate gap with numbers that are stronger or weaker.
As for the Fed, now that the labor market has officially cracked - because a sub 9mm print means that the rate hikes are really taking their toll on the economy - no surprise that odds of a May rate hike tumbled back below 50% after the huge JOLTS miss...
... and no surprise that stonks are surging: we are now officially back into "bad news is great news" for the market mode, since the end of Biden's fiscal stimmy means that only the Fed is available to kickstart the economy when it officially slides into a recession next.
